Life After Katrina: Bold Promises, Many Broken

Reported by Scott Cohn, written by Michelle Lodge

Published 9:44 AM ET Fri, 27 Aug 2010
CNBC.com

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Corey Sipkin | NY Daily News Archive | Getty Images

Partially-submerged cars and houses make for a surreal sight in the flooded Ninth Ward neighborhood of New Orleans, La. Parts of the low-lying district were swallowed up by 20 feet of water when Hurricane Katrina slammed the city last week. Large swaths of New Orleans still remain under several feet of filthy water, and federal officials say it could take months to drain it.

A major disaster sets the perfect stage for grandstanding. And in 2005, nothing was more “major” than Hurricane Katrina.

In the weeks and months following Katrina, high-profile business executives and government leadersponey-ed up to publicly weep over the devastation and the human suffering. Then they laid out their dramatic plans to come to the rescue.

The problem is, most of those big talkers broke their promises and never came back to New Orleans.

Real estate mogul and reality show host Donald Trump announced plans for a luxury hotel and apartment complex in the downtown area.

“I’m pleased that Trump International Hotel and Tower, an award-winning design, will soon be with you,” Trump said. New Orleans is still waiting and the site remains a parking lot.

Hurricane Katrina 5 Years Later

K-B Homes and the Shaw Group said they would put up as many as 20,000 new homes.

“Big builders like us, who know how to build thousands of homes at a time, have something to add to that rebuild,” said K-B CEO Bruce Karatz in September 2005. Both home-building firms pulled out three years later, claiming there was too little demand (likely due, in part, to the recession.)

Developer Don Peebles told CNBC he felt an obligation to build hotels and affordable housing, saying "I believe in the long-term future of New Orleans."

Peebles never built anything and his spokesperson blamed "the marketplace" for the lack of action.

“The work that has begun in the Gulf Coast region will be one of the largest reconstruction efforts the world has ever seen,” said President George W. Bush.

The latest effort at revitalization is a new 20-year master plan, adopted by the city earlier this month to revamp New Orleans economically, environmentally and politically. It’s now the law—but how those ideas will be funded to reach fruition hasn’t been determined.

Déjà vu?

Maybe, maybe not.

One of the main authors of the plan, David Dixon, from the Boston design firm Goody Clancy that created it, is undaunted.

“You have to start out with an idea before you ask people to invest,” he said. “New Orleans, I think now has credible, bankable ideas.”